Buckle up! Market to post strong gains in July, say experts
Headed into July, experts see Indian equities continue its upmove.
June 28, 2012 / 22:59 IST
Moneycontrol Bureau
It may have been a flat close on the day of expiry, but Indian equities rallied over 4% in the June series, buoyed by hopes of policy reforms and further stimulus measures from central banks. At close today, the Nifty was up 7 points to close at 5,149 and the Sensex gained 23 points to 16,990. For the week, the market is still marginally lower due to the past few days of compressed movement.This series was a turnaround month for the market as compared to May, where the benchmarks fell 5%. Dalal Street managed to shrug off a slew of disappointing events, such as the Reserve Bank of India’s policy, weak GDP growth numbers, and rating agency warnings. On the global screen, the eurozone crisis continued to rear its ugly head, with both Spain and Cyprus applying for financial support.It was hopes of monetary easing that triggered the rally worldwide. The European Central Bank and the US Federal Reserve both held key meetings this month, and expectations for rate cuts and another round of quantitative easing (QE) is what boosted risk assets. Even though both these events failed to deliver, markets held strong and continued their move upwards.Back home, the market was also given a leg up by hopes of some concrete steps from Prime Minister Manmohan Singh who took charge of the finance ministry on Tuesday, after Pranab Mukherjee’s resignation, and said would take steps to revive economic growth.F&O CuesToday being the expiry of the June series for futures and options, experts were buckled up for a volatile day. However, the indices held strong, faltering only towards the end of trade as weak European cues hit sentiment.Going into July, Siddharth Bhamre of Angel Broking says most traders who have short positions have restrained from rolling over their trades. He also points out that the 5,300 call is active in the market currently, which implies that there is more buying in the market at present.“Come July series, you will see the market breach the resistance of 5150-5200 and move towards 5,270-5,300 levels, and that is where some selling might come,” he said.With positive sentiment in the air, and if the European Union summit delivers, Bhamre says we can see a 100 point jump at the start of July.All eyes on EU summitApart from today being the expiry of the June F&O series, today is also the start of the two-day European Union summit in Brussels, where European policymakers meet to discuss ways to tackle the region’s ballooning debt crisis.Traders as well as investors remained cautious ahead of the European Union summit today, unwilling to take long positions. The two-day meeting is expected to produce a roadmap for fiscal, financial and political union and a package of growth-boosting measures, but emergency intervention to ease stress in the bond market look doubtful.According to Tandon, the pressure has reached a breaking point now. With more countries being affected by the crisis in the region, he believes German Chancellor Angela Merkel will be pushed into accepting euro bonds, because it is the only saving grace they have now. But no matter the outcome, he believes the Indian market will not be affected. “From here on, any kind of bullish news can take the market up. It is not as if the world has changed for the better, so we will not go to 6,000, we could move another few hundred points from here,” he said.Anisha Mappat
anisha.mappat@network18online.com Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
